Over the last few months, we have heard about inflation rates and how they have significantly increased over the last year. Most of us immediately think about what we get paid and then go back to the last time we had a raise. If it has been a while, we might even consider asking for another one.
Before you do that, take stock in your Personal Inflation Rate. The same way economists track local, state and national numbers, you can track your own personal inflation rate.
To do so, you must first keep track of all of your monthly expenses. If you are doing that, you can go back to July of last year and compare it to July of this year. Take your monthly bills from July 2022 and divide them by the same list from July 2021. That will give you your personal inflation rate.
For example, if you spend $5,000 during the month of July 2021 and this year in July 2022, you spent $5,400, you can apply the math.
Take $5,400 and divide it by $5,000 and it give you a 7.4% Personal Inflation Rate (or 8% if your calculator rounds to the nearest 100th.)